General

Spain "needs to do more" to reduce youth unemployment and precariousness, says the OECD

10/05/2007 - Spain has made significant progress over the past decade in improving employment prospects of young people, but there is still much to be done to improve the regulations that affect young people’s chances of finding jobs, according to a new OECD report.

The report, “Jobs for Youth: Spain”, notes that the proportion of young people aged 16-24 who have a job has risen by more than 50% over the past decade – in sharp contrast to the OECD average which was stable over the same period (see table). Youth unemployment and the incidence of long-term unemployment have more than halved over the past decade.

But the youth unemployment rate, at almost 18% in 2006, is still more than 3 percentage points above the OECD average. In particular, young Spanish women have one of the highest unemployment rates in the OECD. And, while the incidence of temporary work among young people with jobs has tended to decrease, it was still 66% in 2006, over twice the corresponding OECD average of about 30%. As in other OECD countries, many young people enter the labour market with a temporary contract. However, Spain is unique in that young people tend to stay on temporary contracts for a very long period of time, interspersed with frequent spells of unemployment when moving from one contract to the next.

Several barriers need to be removed to further improve young people’s labour market prospects in Spain. First, as in other OECD countries, the labour market is becoming more and more selective and the lack of relevant skills brings a higher risk of unemployment. In Spain, one in four young people leave school with less than upper secondary education – one of the highest drop-out rates among OECD countries.

Links between the education system and work are weak and work-based learning is limited to students in vocational education – whose performance in terms of access to employment after leaving school is relatively good. Furthermore, strict employment protection for people with permanent contracts has contributed to a marked segmentation between temporary and permanent jobs in the Spanish labour market, negatively affecting the career prospects and training opportunities of young people.

To address these issues, the OECD report makes a number of recommendations:

Increase participation in early childhood education and ensure sustained support. Early childcare services could benefit from additional public help. Particular attention should be paid to ensure that these services reach children at the highest risk of dropping out of school and that support is sustained during schooling.

Ensure availability of apprenticeships in firms for all students attending vocational education. Apprenticeships are much less developed in Spain than in other OECD countries. It is essential to ensure that in-work training is available to all students attending vocational education. This requires greater participation of business associations in the design of curricula. Particular attention should be paid to setting the apprenticeship wage at a level that reflects the training efforts of employers, thus ensuring that sufficient apprenticeship places are available.

Develop short-cycle university degrees and encourage attendance in these courses. University studies in Spain need to be less theoretical and more related to the needs of the labour market. Short-cycle university degrees would help to achieve this.

Achieve greater convergence in the treatment of temporary versus permanent contracts. Reducing the difference in dismissal compensation between temporary and permanent contracts would improve employers’ incentives to provide more stable jobs to young people – by either converting temporary contracts into permanent ones, or recruiting directly under permanent contracts.

Increase the length of the trial period in permanent contracts. The current statutory trial period in permanent contracts is among the shortest in OECD countries and collective agreements often negotiate shorter lengths. Raising it would make employers less reluctant to hire inexperienced young people under permanent contracts and could provide a crucial boost to hiring.

Ensure that effective employment services for unemployed young people are provided at an early stage. Young people should participate in intensive, personalised interviews with employment counsellors. If they are unsuccessful in finding work after searching for between three and six months, they should be provided with an opportunity to i) participate in a well-designed programme; ii) work as part of a targeted subsidised scheme; or iii) go back to school.

The report, entitled Jobs for Youth: Spain, is the latest in a series launched by the OECD in some sixteen countries.

To obtain a copy of the publication or for further information, journalists should contact the Media Division (tel. 33 1 45 24 97 00). The report can be purchased in paper or electronic form through the OECD’s Online Bookshop. Subscribers and readers at subscribing institutions can access the online version via SourceOECD.